Error "Dynare does not solve purely backward models at higher order

Stochastic simulations
1

solow.txt (1.7 KB)

Hello fellows,

I created the attached file to solve a Solow model (log-linearized). However when I run it the following error is presented:

STOCHASTIC_SOLVER: Dynare does not solve purely backward models at higher order.
STOCHASTIC_SOLVER: To circumvent this restriction, you can add a forward-looking dummy equation of the form:
STOCHASTIC_SOLVER: junk=0.9*junk(+1);

I do not want to do workarounds to solve it like the recommendation so I would like to know if someone has a more appropriated solution. thanks

Jose

2

Dear Jose, you do not need to approximate backward nonlinear models. You can use the extended path algorithm (command is described in the reference manual). We do have more efficient algorithm in Dynare unstable but we still have to document them.

Best,
Stéphane

3

Why do you even use a stochastic version of the model? Please see https://github.com/JohannesPfeifer/DSGE_mod/tree/master/Solow_model

4

hello professor.
Your models are too complicated to be understood by a dynare rookie.
thanks for trying to help me but I still could not solve the error.

5

You should try to understand the best practice codes. That should be more helpful than starting from scratch with something that may completely go in the wrong direction. In particular, you start with a technical Dynare question, but you are not responding to questions about the economic experiment you are trying to conduct.

6

anyway , this code is still useless even for rookies which know exactly the experiment to be conducted.

7

Nobody prevents you from asking questions to understand it.